THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY AND WORKING CAPITAL MANAGEMENT ON SMES PERFORMANCE DURING A PANDEMIC
##plugins.themes.bootstrap3.article.main##
##plugins.themes.bootstrap3.article.sidebar##
Abstract
The main purpose of the study is to examine the impact of corporate social responsibility (CSR) and working capital management practices on the performance of small and medium-sized firms (SMEs) in Kosovo during the lock-in period. In addition, the aim of the study is to investigate how employee behavior affects the relationship between corporate social responsibility, working capital management and the performance of small and medium-sized enterprises. A quantitative research method is used to obtain the necessary data. Respondents are employees of small and medium-sized businesses currently working in Kosovo, and surveys are mailed and in person. The PLS-SEM method was used to examine whether there is a statistically significant relationship between corporate social responsibility, working capital management practices, and SMEs performance. The relationship between corporate social responsibility, working capital management and financial success was investigated using a quantitative research method. The study found a significant correlation between corporate social responsibility (CSR), working capital management practices and the success of small and medium-sized enterprises (SMEs) in Kosovo. The data also showed that employee behavior plays a mediating role in the relationship between corporate social responsibility (CSR), working capital management practices and the performance of small and medium enterprises in Kosovo, according to the results. Significant gaps in the work have been identified as a result of inconsistent application of financial criteria by businesses that define sustainability. In addition, the study contributes to the preservation of enterprise valuation standards by providing guidance for small business owners and operators.
How to Cite
##plugins.themes.bootstrap3.article.details##
corporate social responsibilities, working capital management practices, the performance of SMEs, employee behavior
Abimbola, O. A., & Kolawole, O. A. (2017). Effect of working capital management practices on the performance of small and medium enterprises in Oyo state, Nigeria. Asian Journal of Economics, Business, and Accounting, 15, 1–8. DOI: https://doi.org/10.9734/AJEBA/2017/35237
Afrifa, G. A. (2015). Working capital management practices and profitability of AIM listed SMEs. Journal of Enterprising Culture, 23(01), 1–23. DOI: https://doi.org/10.1142/S0218495815500016
Afrifa, G. A. (2016). Net working capital, cash flow and performance of UK SMEs. Review of Accounting and Finance, 15(1), 21–44. DOI: https://doi.org/10.1108/RAF-02-2015-0031
Ahmed, A., Arshad, M. A., Mahmood, A., & Akhtar, S. (2019). The influence of spiritual values on employee’s helping behavior: the moderating role of Islamic work ethic. Journal of Management, Spirituality & Religion, 16(3), 235–263. DOI: https://doi.org/10.1080/14766086.2019.1572529
Aidoo, S. O., Agyapong, A., & Mensah, H. K. (2020). Social capital and performance of SMEs: The role of entrepreneurial orientation and managerial capability. Africa Journal of Management, 6(4), 377–406. DOI: https://doi.org/10.1080/23322373.2020.1830698
Al Halbusi, H., Williams, K. A., Mansoor, H. O., Hassan, M. S., & Hamid, F. A. H. (2020). Examining the impact of ethical leadership and organizational justice on employees’ ethical behavior: Does person-organization fit play a role? Ethics & Behavior, 30(7), 514–532. DOI: https://doi.org/10.1080/10508422.2019.1694024
Anwar, M., Tajeddini, K., & Ullah, R. (2020). Entrepreneurial finance and new venture success-The moderating role of government support. Business Strategy & Development, 3(4), 408–421.
Baker, H. K., Kumar, S., & Singh, H. P. (2019). Working capital management: evidence from Indian SMEs. Small Enterprise Research, 26(2), 143–163. DOI: https://doi.org/10.1080/13215906.2019.1624386
Basheer, M. F., Muneer, S., Nawaz, M. A., & Ahmad, Z. (2020). The antecedents of corporate social and environmental responsibility discourse in Pakistan: Multiple theoretical perspectives. Abasyn University Journal of Social Sciences, 13(1), 1–11. DOI: https://doi.org/10.34091/AJSS.13.1.01
Bendavid, I., Herer, Y. T., & Yücesan, E. (2017). Inventory management under working capital constraints. Journal of Simulation, 11(1), 62–74. DOI: https://doi.org/10.1057/s41273-016-0030-0
Benlemlih, M., & Cai, L. (2020). Corporate environmental performance and financing decisions. Business Ethics: A European Review, 29(2), 248–265.
Benzidia, S., & Makaoui, N. (2020). Improving SMEs performance through supply chain flexibility and market agility: IT orchestration perspective. Supply Chain Forum: An International Journal, 21(3), 173–184. DOI: https://doi.org/10.1080/16258312.2020.1801108
Bojica, A. M., Ruiz Jiménez, J. M., Ruiz Nava, J. A., & Fuentes-Fuentes, M. M. (2018). Bricolage and growth in social entrepreneurship organisations. Entrepreneurship & Regional Development, 30(3-4), 362–389. DOI: https://doi.org/10.1080/08985626.2017.1413768
Boțoc, C., & Anton, S. G. (2017). Is profitability driven by working capital management? evidence for high-growth firms from emerging Europe. Journal of Business Economics and Management, 18(6), 1135–1155. DOI: https://doi.org/10.3846/16111699.2017.1402362
Cicea, C., Popa, I., Marinescu, C., & Cătălina Ștefan, S. (2019). Determinants of SMEs’ performance: evidence from European countries. Economic Research-Ekonomska Istraživanja, 32(1), 1602-1620. DOI: https://doi.org/10.1080/1331677X.2019.1636699
Col, B., & Patel, S. (2019). Going to haven? Corporate social responsibility and tax avoidance. Journal of Business Ethics, 154(4), 1033–1050.
Crespo, C. F., & Inacio, N. (2019). The influence of corporate social responsibility associations on consumers’ perceptions towards global brands. Journal of Strategic Marketing, 27(8), 679–695. DOI: https://doi.org/10.1080/0965254X.2018.1464497
Dahlgaard-Park, S. M., Reyes, L., & Chen, C.-K. (2018). The evolution and convergence of total quality management and management theories. Total Quality Management & Business Excellence, 29(9-10), 1108–1128. DOI: https://doi.org/10.1080/14783363.2018.1486556
Hair Jr, J. F., Babin, B. J., & Krey, N. (2017). Covariance-based structural equation modeling in the Journal of Advertising: Review and recommendations. Journal of Advertising, 46(1), 163–177. DOI: https://doi.org/10.1080/00913367.2017.1281777
Han, H., Yu, J., Lee, K.-S., & Baek, H. (2020). Impact of corporate social responsibilities on customer responses and brand choices. Journal of Travel & Tourism Marketing, 37(3), 302–316. DOI: https://doi.org/10.1080/10548408.2020.1746731
Hao, W., Shah, S. M. A., Nawazb, A., Barkat, M. Q., & Souhail, A. (2020). COVID-19 Epidemic Spread and the Impact on Public Health & Safety Policy: An Analysis of the Adoption of Preventive Measures and Effective Management: Evidence from Pakistan. Revista Argentina de Clínica Psicológica, 29(4), 722–736. DOI: https://doi.org/10.24205/03276716.2020.877
Haski-Leventhal, D. (2018). Strategic Corporate Social Responsibility. SAGE Publications.
Haslam, P. A. (2018). Beyond voluntary: state–firm bargaining over corporate social responsibilities in mining. Review of International Political Economy, 25(3), 418–440. DOI: https://doi.org/10.1080/09692290.2018.1447497
Hervas-Oliver, J.-L., Sempere-Ripoll, F., Boronat-Moll, C., & Estelles-Miguel, S. (2020). SME open innovation for process development: Understanding process-dedicated external knowledge sourcing. Journal of Small Business Management, 58(2), 409–445. DOI: https://doi.org/10.1080/00472778.2019.1680072
Hoxha, R, Hoti, H., & Ahmeti, R. (2016). Management perspective and development of small and medium enterprises in Kosovo. CBU International Conference on Innovations in Science and Education, MARCH 23–25, 2016, PRAGUE, CZECH REPUBLIC. DOI: https://doi.org/10.12955/cbup.v4.869
Hoxha, R., Hoti, H., & Ahmeti, R. (2016). Working capital and profitability in manufacturing firms in Kosovo: An empirical study. Global Business Review, 16(4), 545–556. DOI: https://doi.org/10.1177/0972150915581098
Jain, P., Vyas, V., & Roy, A. (2017). Exploring the mediating role of intellectual capital and competitive advantage on the relation between CSR and financial performance in SMEs. Social Responsibility Journal, 13(1), 1–23. DOI: https://doi.org/10.1108/SRJ-04-2015-0048
Jino, M. J., & Dyaram, L. (2019). The Mediating Role of Moral Ownership in the Relationship Between Organizational Support and Employees’ Ethical Behavior: A Study of Higher Education Faculty Members. Ethics & Behavior, 29(4), 305–319. DOI: https://doi.org/10.1080/10508422.2017.1409628
Ilyas, S., Hu, Z., & Wiwattanakornwong, K. (2020). Unleashing the role of top management and government support in green supply chain management and sustainable development goals. Environmental Science and Pollution Research, 27(8), 8210–8223.
Kao, F.-H., & Cheng, B.-S. (2017). Proservice or antiservice employee behaviors: A multilevel ethics perspective. Human Performance, 30(5), 272–290. DOI: https://doi.org/10.1080/08959285.2017.1399130
Kayani, U. N., De Silva, T.-A., & Gan, C. (2019). Working capital management and corporate governance: a new pathway for assessing firm performance. Applied Economics Letters, 26(11), 938–942. DOI: https://doi.org/10.1080/13504851.2018.1524123
Khan, S. Z., Yang, Q., Khan, N. U., Kherbachi, S., & Huemann, M. (2020). Sustainable social responsibility toward multiple stakeholders as a trump card for small and medium-sized enterprise performance (evidence from China). Corporate Social Responsibility and Environmental Management, 27(1), 95–108.
Kura, K. M., Shamsudin, F. M., Umrani, W. A., & Salleh, N. M. (2019). Linking Human Resource Development Practices to Counterproductive Work Behaviour: Does Employee Engagement Matter. Journal of African Business, 20(4), 472–488. DOI: https://doi.org/10.1080/15228916.2019.1583974
Lee, S., & Jung, H. (2016). The effects of corporate social responsibility on profitability: The moderating roles of differentiation and outside investment. Management Decision, 54(6), 1383–1406. DOI: https://doi.org/10.1108/MD-07-2015-0268
Lu, J., Ren, L., Yao, S., Qiao, J., Mikalauskiene, A., & Streimikis, J. (2020). Exploring the relationship between corporate social responsibility and firm competitiveness. Economic Research-Ekonomska Istraživanja, 33(1), 1621–1646. DOI: https://doi.org/10.1080/1331677X.2020.1761419
Manzoor, F., Wei, L., Nurunnabi, M., Subhan, Q. A., Shah, S. I. A., & Fallatah, S. (2019). The impact of transformational leadership on job performance and CSR as mediator in SMEs. Sustainability, 11(2), 436–449. DOI: https://doi.org/10.3390/su11020436
Mielcarz, P., Osiichuk, D., & Behr, A. (2018). The influence of capital expenditures on working capital management in the corporate sector of an emerging economy: the role of financing constraints. Economic Research-Ekonomska Istraživanja, 31(1), 946–966. DOI: https://doi.org/10.1080/1331677X.2018.1436450
Min, M., Desmoulins-Lebeault, F., & Esposito, M. (2017). Should pharmaceutical companies engage in corporate social responsibility? Journal of Management Development, 36(1), 58–70.
Mohammed, W. F., Xiao, A., & Hilton, E. (2019). A Critical Analysis of Corporate Social Responsibility in Ghana’s Telecommunications Industry. Communicatio, 45(3), 4–22. DOI: https://doi.org/10.1080/02500167.2018.1552601
Mohiuddin, M., & Su, Z. (2013). Offshore outsourcing of core and non-core activities and integrated Firm-level performance: An empirical analysis of Québec manufacturing SMEs. Management, 16(4), 454–478. DOI: https://doi.org/10.3917/mana.164.0454
Nakku, V. B., Agbola, F. W., Miles, M. P., & Mahmood, A. (2020). The interrelationship between SME government support programs, entrepreneurial orientation, and performance: A developing economy perspective. Journal of Small Business Management, 58(1), 2–31. DOI: https://doi.org/10.1080/00472778.2019.1659671
Ogunyomi, P., & Bruning, N. S. (2016). Human resource management and organizational performance of small and medium enterprises (SMEs) in Nigeria. The International Journal of Human Resource Management, 27(6), 612–634. DOI: https://doi.org/10.1080/09585192.2015.1033640s
Okolie, U. C., & Igbini, D. M. (2020). Corporate social responsibility and performance of Nigerian quoted firms: An empirical study. Trendy Ekonomiky a Managementu, 14(35), 79–94. DOI: http://dx.doi.org/10.13164/trends.2020.35.79
Owen, R., Brennan, G., & Lyon, F. (2018). Enabling investment for the transition to a low carbon economy: government policy to finance early stage green innovation. Current Opinion in Environmental Sustainability, 31, 137–145.
Pais, M. A., & Gama, P. M. (2015). Working capital management and SMEs profitability: Portuguese evidence. International journal of managerial finance, 11(3), 341–358. DOI: https://doi.org/10.1108/IJMF-11-2014-0170
Park, S. I., & Seo, J. H. (2018). Does strategic orientation fit all? The effects of strategic orientation on high versus low-performing SMEs. Asian Journal of Technology Innovation, 26(3), 290–305. DOI: https://doi.org/10.1080/19761597.2018.1547880
Quinton, S., Canhoto, A., Molinillo, S., Pera, R., & Budhathoki, T. (2018). Conceptualising a digital orientation: antecedents of supporting SME performance in the digital economy. Journal of Strategic Marketing, 26(5), 427-439. doi: http://dx.doi.org/10.1080/0965254X.2016.1258004
Rehman, A. U., & Anwar, M. (2019). Mediating role of enterprise risk management practices between business strategy and SME performance. Small Enterprise Research, 26(2), 207–227. DOI: https://doi.org/10.1080/13215906.2019.1624385
Shin, H. H., & Soenen , L. (1998). Efficiency of working capital management and corporate profitability. Financial Practice and Education, 37–45.
Singhania, M., & Mehta, P. (2017). Working capital management and firms’ profitability: evidence from emerging Asian countries. South Asian Journal of Business Studies, 6(1), 80–97. DOI: https://doi.org/10.1108/SAJBS-09-2015-0060
Spanos, L. (2018). Complementarity and interconnection between CSR and crowdfunding: A case study in Greece. In Corporate Responsibility and Digital Communities (pp. 29–49). Palgrave Macmillan.
Tirumalsety, R., & Gurtoo, A. (2021). Financial sources, capital structure and performance of social enterprises: Empirical evidence from India. Journal of Sustainable Finance & Investment, 11(1), 27–46.
Valdez-Juárez, L. E., Gallardo-Vázquez, D., & RamosEscobar, E. (2018). CSR and the supply chain: Effects on the results of SMEs. Sustainability.
Wang, M.-X. (2018). Construction of “responsibility-oriented” education system of corporate social responsibility in colleges. Journal of Interdisciplinary Mathematics, 21(2), 369–376. DOI: https://doi.org/10.1080/09720502.2017.1420566
Wang, T., Thornhill, S., & Zhao, B. (2018). Pay-for-Performance, Employee Participation, and SME Performance. Journal of Small Business Management, 56(3), 412–434. DOI: https://doi.org/https://doi.org/10.1111/jsbm.12268
Whait, R. B., Christ, K. L., Ortas, E., & Burritt, R. L. (2018). What do we know about tax aggressiveness and corporate social responsibility? An integrative review. Journal of Cleaner Production, 204, 542–552.
Zhang, D. (2017). Is working capital management value-enhancing through alleviating financial constraints? Evidence from Chinese non-listed firms. Journal of Chinese Economic and Business Studies, 15(4), 373–406. DOI: https://doi.org/10.1080/14765284.2017.1346929